Goldman Sachs, hedge fund billionaire back $27M social impact bond

CNBC – Goldman Sachs, hedge fund billionaire John Arnold and other philanthropic partners funded the largest ever social impact bond Wednesday, a $27 million effort to prevent young men in Massachusetts from going back to jail or prison.

Social impact bonds are a hot new form of philanthropy where private donors provide money to fund social impact programs. If the tangible goals of the program are accomplished—in this case, more people stay out of jail or prison—then government funding pays back the donors with a modest profit. The government also wins, in theory, by saving money from the related reductions in the social services it must provide.